Protecting Your Investment- Canola Crop Insurance Options

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1 Protecting Your Investment- Canola Crop Insurance Options December Crop Year

2 Supplemental Coverage Option The 2014 Farm Bill authorized the new Supplemental Coverage Option (SCO) endorsement for the 2015 and succeeding crop years. Available crops: Barley, Corn, Sbeans, and Wheat Only available for crops enrolled in PLC Not available until 2015 County level insurance policy Government pays 65% of premium 2

3 Beginning Farmer & Rancher Benefits Additional 10 percentage points premium subsidy Use of previous producer s production history Additional 20% for yield adjustment (YA) Waiver of administrative fees 3

4 Beginning Farmer & Rancher Definition: An Individual must not have actively operated and managed a farm or ranch in any county, in any state, with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than five crop years, excluding any crop year the BFR was: Under the age of 18 Post secondary Studies Active duty in the U.S. Military 4

5 Exclusion of Yields The Farm Bill amendment allows an insured to exclude any recorded or appraised yield for any crop year in which the per planted acre yield in the county is at least 50% below the simple average for the crop in the county for the previous 10 consecutive crop years. 5

6 Exclusion of Yields How will it go into effect? RMA will provide additional program details in December The actuarial documents that identify the county, crop, practice and crop years to be excluded will be available in December

7 Exclusion of Yields What crops are impacted? Where? Eligible crops include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn. These are crops with YP, RP, and RPHPE policies. Nearly three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion. 7

8 APH Yield Drop corn 1 Year 2 Years 3 to 9 Years

9 APH Yield Drop - soybeans 1 Year 2 Years 3 to 6 Years

10 APH Yield Drop - Wheat 1 to 2 Years 3 to 4 Years 5 to 8 Years 9 to 12 Years

11 Enterprise Units by Practice The 2014 Farm Bill provides producers the option of having separate enterprise units for a crop in the county based on irrigated and nonirrigated practices if in the actuarial documents. If the irrigated and non-irrigated acreage does not qualify separately, then only a single EU (combined irrigated and non-irrigated acreage) will be allowed. 11

12 Coverage Level by Practice The 2014 Farm Bill provides producers the option of electing different coverage levels for irrigated and non-irrigated acreage IF coverage for both practices are provided for separately in the actuarial documents and the crop provisions allow separate coverage. 12

13 Whole Farm Revenue Protection What are the features of WFRP? All farm revenue is insured together under one policy. o Individual commodity losses are not considered, it is the overall farm revenue that determines losses o Well-suited for highly diverse farms 13

14 Whole Farm Revenue Protection What will my agent need from me? Five years of farm tax forms o For 2015, requires tax forms from What causes a loss payment? Natural causes of loss and decline in market price during the insurance year Taxes must be filed for insurance year before claim can be made 14

15 Canola T-Yield and Rate Review County 2015 T-Yield 2014 T-Yield Kittson Lake of the Woods Pennington Roseau Premium rates are reduced due to T-Yield and rate reviews.

16 2015 Canola TA Factors County Type Practice TA Factor Kittson Spring Oleic Irrigated Kittson Spring Oleic Non-Irrigated Lake of the Woods Lake of the Woods Spring Oleic Irrigated Spring Oleic Non-Irrigated Marshall Spring Oleic Irrigated Marshall Spring Oleic Non-Irrigated Pennington Spring Oleic Irrigated Pennington Spring Oleic Non-Irrigated Roseau Spring Oleic Irrigated Roseau Spring Oleic Non-Irrigated 25.35

17 Rotation Requirements Insurance will not attach to any acreage on which canola, crambe, chickpeas, dry beans, mustard, rapeseed, or sunflowers have been planted in either of the preceding two crop years (three year rotation) with the exception below: In a two year rotation, canola, crambe, chickpeas, dry beans, mustard, rapeseed, or sunflowers cannot have been planted in the preceding crop year and a blackleg resistant variety (MR-R) must be planted with the insured providing proof of variety by the acreage reporting date. A rate surcharge (CR) will apply (10%). A crop which was planted, and then all plant growth is terminated by chemical or mechanical means prior to June 15, will not be considered planted for rotational purposes only. The insured is responsible to provide proof of insurability. Page 1

18 Plan Options Revenue Protection Revenue Protection with HPE Yield Protection Whole Farm Revenue Protection Page 1

19 RP Projected Price The harvest year s average daily settlement price for the projected price discovery period for the harvest year s futures contract, as shown in the table below, divided by 2,205. This factor converts the ICE canola price from Canadian dollars per metric ton to Canadian dollars per pound. To convert into U.S. dollars per pound, obtain the average daily settlement price for the projected price discovery period for the harvest year s CME December Canadian dollar futures contract, rounded to the nearest one-tenth of a cent, and then multiply by the Canadian price per pound, and round to the nearest one-tenth of a cent. The projected price will be released no later than three business days following the end of the projected price discovery period =.184 Page 1

20 RP Harvest Price The harvest year s average daily settlement price for the harvest price discovery period for the harvest year s futures contract, as shown in the table below, divided by 2,205. This factor converts the ICE price from Canadian dollars per metric ton to Canadian dollars per pound. To convert into U.S. dollars per pound, obtain the average daily settlement price for the harvest price discovery period for the harvest year s CME December Canadian dollar futures contract, rounded to the nearest one-tenth of a cent, and then multiply by the Canadian price per pound, and round to the nearest one-tenth of a cent. The harvest price will be released no later than three business days following the end of the harvest price discovery period =.168 Page 1

21 RP-Discovery Periods Page 1

22 Specialty Canola Insurance Specialty canola insurance, beginning with the 2013 crop year, provides producers with the ability to elect yield or revenue protection for specialty canola and to insure their specialty type canola at a contract price if grown under contract. The specialty type insured is Spring High Oleic canola as defined in the Special Provisions and is available in the states of Minnesota, Montana and North Dakota.

23 Specialty Canola Insurance If you produce any of the following specialty canola type(s) (including specialty type(s) grown for seed): A. Spring High Oleic Acid: Any variety of canola containing not more than 3.5 percent linolenic acid in the seed. You may elect to use the price contained in your production contract (contract price) by the acreage reporting date to determine your projected price and harvest price, as applicable, for each specialty type only if the total number of insured acres of the specialty type does not exceed 110 percent of insured specialty type acreage under the contract (the number of acres under contract is determined as indicated below). The acreage must be under contract with a business enterprise equipped with facilities appropriate to handle and store specialty type canola production. The contract must be executed by you and the business enterprise, in effect for the crop year, and you must provide a copy to us no later than the acreage reporting date. Contract Price Limit Factor= 1.20

24 Wrap-Up Questions? Nothing in this material overrides the rules outlined in the applicable policy provisions, handbooks, or other related documents for either federal or private insurance products. Please refer to the official documents for the most current, complete information. Any forms shown in this material are for training purposes only and are not to be photocopied or printed for official use. Any system screen shots in this material are current as of the training material publication date. Rural Community Insurance Agency, Inc., D/B/A RCIS. RCIS is an equal opportunity provider Rural Community Insurance Agency, Inc. All rights reserved.

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